Downsides To Advertising Funds, Talking To Press

Attorneys and fund marketers predict that buyout shops, particularly those that market to wealthy investors, will take advantage of a proposed rule allowing them to advertise and talk to the press when soliciting investors for their private funds. But some also warn of downsides, such as the risk of raising your profile with federal and state regulators who will be watching carefully for any missteps.

Indeed, some state regulators wrote strongly-worded cautions in commenting on the Securities and Exchange Commission’s late August proposal lifting the ban on general solicitation and advertising during Rule 506(c) offerings. “Rule 506 offerings have been a frequent and steady source ...

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